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Airbus, the European conglomerate that shares the large-jet market with Boeing, reported fourth-quarter results on Thursday that didn’t make inspiring reading.
- The fourth-quarter numbers were actually a little better than consensus expectations. Its adjusted earnings before interest and tax dropped 35% to €1.83 billion ($2.21 billion), on a 19% drop in revenue to €19.75 billion. That was ahead of consensus expectations for an operating profit of €1.66 billion on revenue of €19.18 billion.
- The issue was the guidance. Airbus AIR, -2.78% doesn’t expect to deliver more aircraft in 2021 — as the world gets inoculated with COVID-19 vaccines — than the 566 it delivered in 2020.
- Airbus 0KVV, -3.73% expects its adjusted EBIT to rise to €2 billion, after earning €1.7 billion last year and €6.95 billion in 2019.
- Free cash flow, excluding mergers and acquisitions and customer financing, is forecast to break even.
The outlook: The stock market reaction, if anything, was kind, with the shares losing about 4% in morning trade. Analysts at Bank of America said the Airbus profit guidance looks conservative, even if deliveries are unchanged this year. And management may simply be trying to set a low bar — Airbus did insert the words “at least” before setting out its 2021 guidance.
Air France-KLM AF, -0.29%, a client of both Airbus and Boeing BA, -2.69%, also reported results on Thursday, and said it expects capacity to return to 2019 levels by 2024, implying a more hopeful recovery to air travel.
From the archives (December 2020): Tariffs over Airbus and Boeing dispute to be lifted by the U.K. post-Brexit
